Tesla sales slump on ageing line up, competition

: Battery materials
25/02/12

US firm Tesla's electric vehicle (EV) sales have continued to fall this year — but as a result of structural factors, such as increased competition, duties and the arrival of Chinese carmakers in the market, and not because of chief executive Elon Musk's public profile, market participants have told Argus.

Tesla's European sales fell by 11pc in 2024, having risen by 56pc in 2023 (see graph). In January 2025, Tesla's sales fell by 63pc on the year in France, 59.5pc in Germany, 44.3pc in Sweden, and 37.9pc in Norway.

The smaller 7.8pc fall in the non-EU UK could be explained by the different tariff regime. Some Tesla models sold in Europe are manufactured in Shanghai, and the UK has decided not to impose tariffs on Chinese-made EVs, while the EU imposed a 7.8pc duty on Tesla's Chinese-made EVs in October.

Demand for Teslas in the UK, France, Germany and US began to decline in April last year, according to Ben Marks, founder of Electrify Research. Marks also pointed to "notable drops in July and October, by which time Tesla had fallen from the first to fourth-placed brand — trailing Audi, BMW and VW".

According to a survey conducted last month by car testers Electrifying.com, of 455 non-EV drivers, 56pc would be happy to buy Chinese, while 59pc have been put off buying a Tesla by the public profile of chief executive Elon Musk, although some market participants pointed to other problems.

"Tesla's problems are likely not to do with British motorists' perceptions of Elon Musk, and more to do with the fact that Tesla haven't released a new car since the Model Y, while its competitors have been playing catch-up," independent transport research organisation New AutoMotive's chief executive, Ben Nelmes, said.

And with Chinese EV makers now in Europe, and over 130 mainstream EV models available in the UK, "competition has never been fiercer", Electrifying.com chief executive Ginny Buckley told Argus. "[Tesla's] dominance is no longer guaranteed."

Meanwhile, Slovakian battery maker InoBat's vice-chair, Andy Palmer, said Tesla "needs to think long and hard about its positioning and product offers if it wants to stop bleeding market share".

Tesla models also rely on production of a battery chemistry that is increasingly concentrated in China(see graph).

Standard-range versions of Tesla's best-selling Model 3 and Model Y both use lithium iron phosphate (LFP) batteries, rather than premium nickel-cobalt-manganese-based (NCM) batteries.

And while input costs of LFP-based EVs have edged down to a discount to NCM-based EVs (see graphs), domestic LFP production has enabled Chinese carmakers such as BYD to sell their models at prices that are increasingly competitive with Tesla.

Tesla better placed to cope than legacy carmakers

Tesla's Model Y is still comfortably the best-selling EV model, according to research firm Jato Dynamics.

"One of the things with car sales, particularly retail sales — it's not logical, otherwise everyone would drive a Toyota Corolla. People drive the new shiny things. Tesla used to be the shiny thing with the Model Y, but not so much now," the founder of ratings service The Car Expert, Stuart Masson, told Argus.

Until recently, Tesla "showed you don't have to make design changes for the sake of it" according to Masson, going against prevailing wisdom. Tesla's cars often still topped ratings for safety, battery efficiency and technology after 3-4 years on the road.

Tesla is "better placed to cope" with Chinese competition because it "doesn't have a lot of legacy infrastructure", Masson added. The firm has never had dealers, as conventional carmakers have, or big showrooms that require steady monthly sales. Instead, it operates its own showrooms and interacts with customers directly over the internet, cutting out the middleman used by established dealer networks.

Volkswagen, by contrast, "can't sack anyone in Germany because of the unions and local government that have seats on the board; they veto any attempts", Masson said. "It's haemorrhaging money, and it knows full well that most expensive factories are in Germany, but it can't get rid of them."

Volkswagen Group's operating profit dropped by 42pc on the year to €2.9bn in the third quarter of 2024 and its operating margin was just 3.6pc.

Tesla also makes a much bigger profit from EVs than any western car company, so it can better afford to reduce prices.

The firm is also now much more than just a carmaker, Masson added, having launched an energy storage gigafactory in Shanghai this week.

"From cars to battery storage, superchargers, robo-taxis and robo-vans, they've launched several concepts that have never gone to production, but they tend to find their feet in every market," Masson said. "I think it will still be okay, but we're not going to see continued growth of 100pc per year … I think there are a lot of car companies that are in far more trouble."

By Chris Welch

Tesla annual BEV sales in Europe

China monthly battery production GWh

NCM EV input material price model $

LFP EV input material price model $

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25/05/05

Australia’s election gives LNG, fuels sector certainty

Sydney, 5 May (Argus) — Australia's governing Labor party's second majority term could mean that changes to the offshore permitting regime promised last year are signed into law, while east coast LNG businesses will avoid a planned reservation system proposed by the opposition. Labor's victory at the 3 May election combined with the election of fewer members from the Greens party and climate-focused independents, could mean it faces less pressure to cancel fossil fuel projects. But it will remain reliant on the Greens to pass laws through the nation's upper house — the senate — meaning Labor may need to negotiate the passage of bills with the leftist party if the Liberal-National-based coalition opposes its measures. The Greens ran on a promise to ban new coal, oil and gas projects but won fewer seats than in 2022 because of preference flows. A federal decision on the lifetime extension of the Woodside Energy-operated 14.4mn t/yr North West Shelf (NWS) LNG delayed by Labor, is now looking more positive for the firm. The firm sees approval as vital to progressing its Browse gas development offshore northwestern Australia. Voters' rejection of the opposition Coalition on the nation's east coast means its policy to reserve a further 50-100PJ (1.34bn-2.68bn m³/yr) from the Gladstone-based LNG exporters will not proceed. The result provides an opportunity for certainty and stability for the energy sector, upstream lobby Australian Energy Producers said. The group urged the government to focus on new supply as Australia's gas reserves for domestic use rapidly deplete. The government will need to specify exactly how it aims to secure supplies to ensure stable supply, once coal-fired generators retire at the end of the 2020s and into the 2030s. This is because the nation's integrated system plan is based on Labor's policy of reaching 82pc renewable energy in the power grid, backed up by about 15GW of gas-fired power. Industry will await further direction stemming from the Future Gas Strategy which canvassed solutions to Australia's declining gas supply including new pipelines, storage and seasonal LNG imports. Permitting concerns In the government's previous three-year term, a series of court-ordered requirements to consult with affected Aboriginal groups briefly disrupted multi-billion dollar LNG developments. Labor promised to specify through new laws exactly which groups must be consulted before approvals could be granted. But these were dropped from the agenda in early 2024 following opposition by the Greens. Labor's resources minister Madeleine King blamed the Greens for obstructionist manoeuvres on this legislation, but it remains unclear if and when Labor might introduce such laws. Conversely, the Coalition promised to end government support for anti-gas lobbies such as law group the Environmental Defenders Office — set to continue under Labor. In liquid fuels, Labor's victory should boost Australia's electric vehicle (EV) sales, with emissions standards laws set to remain enforced. The Coalition had said it would soften the laws because of concern over cost of living pressures. Plans to temporarily cut the fuel excise will also not progress. Australia's EV take-up has stalled, and industry has blamed this on poor investment in recharging infrastructure and other policy settings, including the removal of the fringe benefits tax exemption for plug-in hybrid car models. A re-elected Labor government is likely to further policy towards a mandate for sustainable aviation fuel or renewable diesel, given the growing share of Australia's emissions projected to come from the transport industry. It pledged A$250mn ($162mn) for low-carbon liquid fuels development in March , for low-carbon liquid fuels development in March, as part of its commitment to the nascent sector. Local market participants are optimistic that further biofuels support will be provided as urgency to meet net zero ambitions builds, including a 2030 target of 43pc lower emissions based on 2005 levels. About A$6bn/yr of feedstocks like canola, tallow and used cooking oil are exported from Australia, while existing ethanol and biodiesel producers are running underutilised plants, making about 175mn litres/yr at present, because of poorly-enforced blending mandates. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK warned of looming battery shortfall as demand surges

25/05/02

UK warned of looming battery shortfall as demand surges

London, 2 May (Argus) — The UK will face a 55GWh shortfall in battery supply by 2035 unless urgent action is taken to scale up domestic manufacturing and reduce reliance on imports, according to a new report from the UK Research and Innovation's (UKRI's) Faraday Battery Challenge. The report, commissioned by the Faraday Battery Challenge and delivered by Innovate UK, forecasts national battery demand to exceed 165 GWh/yr by 2035, rising to nearly 200GWh by 2040. More than 90pc of this demand is expected to come from the automotive sector, with additional pressure from aerospace, rail, marine and energy storage systems. The report identifies the UK's strategic need to establish gigafactories capable of producing high-performance and cost-optimised cells, including cheaper alternatives to nickel manganese cobalt batteries such as lithium iron phosphate and lithium manganese iron phosphate, which are dominated by Chinese producers. While the UK has excelled in battery research at centres such as the Faraday Institution, the report highlights critical gaps in manufacturing infrastructure and policy co-ordination. The Faraday team argues that building a resilient supply chain, from materials to modules, will require targeted industrial support and long-term investment. One source told Argus of the particular need for a battery manufacturing plan independent of a plan for battery electric vehicle (BEV) manufacturing, given the more rapid growth of the battery storage market worldwide. The world's largest battery maker, CATL, sold 381GWh of power batteries last year, up by 19pc on the year, while it sold 93GWh of energy storage batteries, up by 35pc on the year. For the UK to build out its own manufacturing capacity without government support, in the current climate, will be "challenging", Ed Porter of UK battery energy storage market data analysts Modo Energy told Argus . "That need not be a bad thing," he said. "The end goal is to decarbonise at speed." The UK is already planning two battery factories domestically. A 40GWh unit in Somerset is planned with Indian conglomerate Tata , while a 10GWh facility in the Midlands is in the works with China's Far East Battery . Both facilities will be operational by the end of this decade (see map) . The two plants are "being proposed to fill the need" for all electric vehicle (EV) batteries, said Aaron Wade, project director at global battery industry association Volta Foundation, "making another plant unlikely". The UK produced 276,000 EVs last year, including BEVs, plug-in hybrid EVs and hybrid EVs, according to data from industry body SMMT, meaning a large number of its 381,000 BEV sales last year were not domestically produced. And it is a trend that may continue. "It makes most sense for battery plants to be located on the continent, with easier transport and proximity to car factories," Wade said. Battery demand is forecast to climb in other sectors too, such as aerospace and off-highway vehicles, particularly if energy density and charging performances improve. But many manufacturers, particularly those in niche markets, will need aggregation or modular cell solutions to justify investment, by either pooling funds with other end-users or using cells fit for several applications. The UKRI's report comes as major markets China , the US and the EU accelerate efforts to secure battery supply chains, often backed by state support. Industry leaders warn that without a similar ambition, the UK could find itself marginalised in the race to electrification. By Chris Welch Europe gigafactory forecast (Sep '24) GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's Coalition eyes power, resource funding cuts

25/05/02

Australia's Coalition eyes power, resource funding cuts

Sydney, 2 May (Argus) — Australia's federal Coalition opposition has announced it will cut key energy rebates and resource sector subsidies, if elected on 3 May, to reduce forecast future budget deficits. The Peter Dutton-led opposition will cut programs, including the Labor government's A$20bn ($12.8bn) Rewiring the Nation transmission plan, and the A$15bn National Reconstruction Fund aimed at underwriting green manufacturing using domestic minerals. It will also unwind electric vehicle tax concessions to save A$3.2bn, and cancel planned production tax credits for critical minerals processing and green hydrogen estimated to cost A$14.7bn. Combined savings measures will improve the budget's position by A$13.9bn over the four years to 2028-29, the Coalition said on 1 May, cutting debt by A$40bn during the same timeframe. The announcement comes as opinion polls show Australia's next federal government is likely to force one of the two major parties into minority, after a campaign where cost-of-living relief promises have trumped economic reform policy. The centre-left Labor party is more likely than the conservative Coalition to form government at the 3 May poll. It holds a thin majority of just three seats in parliament's main chamber, the House of Representatives, meaning a swing against it would force it to deal with minor parties such as the Greens and independent groupings. Promising a stable government, as Australia emerged from Covid-19, Labor had benefited from a resources boom as Russia's invasion of Ukraine led LNG and coal receipts to skyrocket and China's emergence from lockdowns revitalised its demand for iron ore, which jointly form the nation's main commodity exports. But as markets adjust to a period of protectionist trade policy and predictions of a slowdown in global growth abound, economists have criticised the major parties' reluctance to embrace major reform on areas such as taxation, while continuing to spend at elevated levels post-pandemic. Australia's resource and energy commodity exports are forecast to fall to A$387bn in the fiscal year to 30 June 2025 from A$415bn in 2023–24. The Office of the Chief Economist is predicting further falls over the next five years, reaching A$343bn in 2029-30, lowering expected government revenue from company tax and royalties. Gas The Coalition has pledged a domestic reservation scheme for the east coast, forcing 50-100PJ (1.34bn-2.68bn m³/yr) into the grid by penalising spot LNG cargoes. Australia's upstream lobby has opposed this, but rapidly declining reserves offshore Victoria state mean gas may need to be imported to the nation's south, depending on the success of electrification efforts and an uncertain timeline for coal-fired power retirements. Labor has resisted such further gas interventions , but it is unclear how it will reverse a trend of rising gas prices and diminishing domestic supply, despite releasing a future gas plan last year. The party is promising 82pc renewables nationally by 2030, meaning it will have to nearly double the 2025 year-to-date figure of 42pc. This could require 15GW of gas-fired capacity by 2050 to firm the grid. On environmental policy, narrowing polls mean Labor's likely partners in government could be the anti-fossil fuel Greens and climate-focused independents — just some of the present crossbench of 16 out of a parliament of 151. The crossbench may drive a climate trigger requirement in any changes to environmental assessments, which could rule out new or brownfield coal and gas projects. Coal has been conspicuously absent from policy debates, but Labor has criticised the Coalition's nuclear energy policy as expensive and unproven, while the Coalition has said Labor's renewables-led grid would be unstable and costly because of new transmission requirements. The impact of the US tariff shock that dominated opening days of the month-long election campaign remains unclear. Unlike Canada, Australia is yet to be directly targeted by US president Trump's rhetoric on trade balances and barriers. But the global unease that has set in could assist Labor's prime minister Anthony Albanese, as he presents an image of continuity in an uncertain world economy. Australia's main exposure to Trump tariffs is via China, its largest trading partner and destination for about 35pc of exports, including metal concentrates, ores, coal and LNG. A downturn in the world's largest manufacturer would spell difficult times ahead for Australia, as it grapples with balancing its budget in a normalising commodity market. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ukraine, US sign reconstruction deal

25/05/01

Ukraine, US sign reconstruction deal

London, 1 May (Argus) — The government of Ukraine has agreed a "reconstruction" deal with the US that will establish a fund to be filled with proceeds from new mineral extraction licenses. There are few firm details about how much money will be involved, or how any future extraction contracts will be structured. It appears to be the same agreement that came close to being signed in February , which collapsed after an awkward meeting in the White House between Ukrainian president Volodymyr Zelenskiy and his US counterpart Donald Trump. Washington had pitched the deal in advance as providing stakes in Ukraine's mineral rights, as a form of repayment for past US support and a deterrence against future military incursions by Russia. There is no firm indication from either side that this is the case. Ukraine's economy minister Yulia Svyrydenko said today that 50pc of state budget revenues from new licences will flow into the fund, and the fund would then invest in projects in Ukraine itself. US treasury secretary Scott Bessent said the deal "allows the US to invest alongside Ukraine, to unlock Ukraine's growth assets, mobilise American talent, capital and governance standards", suggesting US companies will be involved in the new licenses. He said the fund will be established with the assistance of the US International Development Finance Corporation. Ukraine was eager to show the deal as a success. Svyrydenko said Kyiv will retain ownership of all resources, and "will decide where and what to extract." Neither does the agreement allow for privatisation of state-owned oil and gas company Ukrnafta or power company Energoatom, nor does it mention any debt obligation to the US, she said. The depth of Ukraine's resources are unclear. The country's geological survey shows deposits of 24 of the EU's list of critical minerals, including titanium, zirconium, graphite, and manganese, along with proven reserves of metals such as lithium, beryllium, rare earth elements and nickel. The IEA estimates Ukraine's oil reserves at more than 6.2bn bl and its gas reserves at 5.4 trillion m³, although it said Russia's annexation of Crimea means Kyiv no longer has access to "significant offshore gas resources". By Ben Winkley, John Gawthrop and James Keates Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Non-China automakers cut targets on BEV demand, tariffs

25/04/30

Non-China automakers cut targets on BEV demand, tariffs

London, 30 April (Argus) — Several non-Chinese automakers have retreated from ambitious 2025 targets after a bruising first quarter, as slowing battery electric vehicle (BEV) demand and escalating trade barriers forced widespread guidance suspensions and production cuts. German carmaker Mercedes-Benz Group led the pullback, withdrawing its full-year outlook today after US tariffs and weakening Chinese sales drove a 41pc drop in first-quarter earnings before interest and tax (Ebit) to €2.3bn ($2.5bn). Chief financial officer Harald Wilhelm warned that US import tariffs could erase 3 percentage points from automakers' profit margins, compounding pressure from delayed BEV adoption. Automaker Stellantis also suspended its 2025 guidance today, reporting a 9pc year-on-year drop in first-quarter sales and a 14pc fall in revenue owing to extended North American holiday shutdowns and disruptions as it electrifies more of its fleet. The firm halted production of Chinese partner Leapmotor's T03 BEV in Poland , citing EU tariffs on Chinese-made EVs, illustrating how trade barriers are impacting western joint ventures with Chinese automakers. Germany's Volkswagen Group has maintained its 2025 outlook but warned that margins would hit the lower end of its 5.5-6.5pc target after first-quarter pre-tax earnings slid by 40pc. The company faces two key challenges — falling demand in China, with a 17pc drop in first-quarter overall car sales in China, and underutilisation of capacity at its European BEV plants . VW Group's chief financial officer Arno Antlitz also acknowledged today that the company has cut its headcount in Germany by about 7,000 since late 2023 on a cost-cutting drive, and that its unchanged guidance does not reflect any impact from US tariffs. US automakers Ford and General Motors (GM) are similarly exposed. Back in February, Ford forecast a net loss of $5.5bn on its EV and software operations for 2025, roughly in line with 2024. This is in spite of an 82pc year-on-year jump in BEV sales in the first quarter — attributed to Tesla's drop in popularity and significant discounts on BEV models. GM suspended its guidance on Tuesday and halted share buybacks after a 6.6pc profit decline — fearing tariff spillovers in the face of a rare $45mn profit in China — despite a 94pc increase in first-quarter EV sales to 31,887 units. Better performing automakers also face a strain. German BMW's first-quarter BEV deliveries rose by 28pc globally, but overall sales fell by 1.4pc as a dip in China of 17.2pc offset gains elsewhere. South Korean automaker Hyundai Group's operating profit rose by 2pc year on year to $2.52bn in January-March, but global sales edged down by 0.6pc, bolstered only by US sales rising by 11pc as consumers rushed to buy vehicles ahead of car tariffs. Tariffs and EU CO2 targets add to pressure Automakers' guidance suspensions also reflect deeper structural pressures as trade barriers on cars and newly announced export controls on some heavy rare earth elements such as dysprosium and terbium are rocking carefully calibrated supply chains. European automakers rely on Chinese battery materials and US-bound exports, leaving them exposed on two counts. At the same time, the EU's 2025 CO2 rules — requiring a 15pc cut in fleet emissions from 2021 levels — are forcing carmakers to sell BEVs at a loss, according to industry body the European Automobile Manufacturers' Association, although clean energy think-tank Transport & Environment disputes this . BEV sales so far this year have risen owing to these targets, despite profitability issues, with a 28pc rise across Europe in the first quarter . Chinese-owned carmakers have faced fewer constraints, although they have retreated from selling BEVs into Europe ( see graph ) after tariffs imposed on Chinese-made EVs last year. Chinese automaker BYD's first-quarter BEV sales surged by 39pc to 416,000 units — beating rival Tesla's 332,000 units — aided by domestic subsidies and tariff-absorbing strategies such as hybrid exports and European production. And China's Geely's Holding Group delivered 483,372 EVs — up by 83pc on the year — making up 49pc of its overall sales, while China's state-owned SAIC delivered 433,000 units, up by 33pc on the year, using the UK assembly of its MG brand to bypass trade barriers. Sweden's Volvo has withdrawn its guidance for 2025 and 2026 after a 59pc drop in first-quarter operating profits, prompting an 18bn kronor ($1.8bn) cost-cutting programme. By Chris Welch Chinese carmakers' west Europe monthly new car sales pc Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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